New research into the resilience of small and medium-sized enterprises (SMEs) has revealed nearly four-fifths (87%) expect to still be trading a year from now.
More than half (56%) expect their profits to increase and 60% plan to invest during the next 12 months.
More than two-thirds (68%) of the UK firms that took in the international survey, carried out on behalf of SME-focused accountancy firm Azets, were positive about the general economic outlook.
Hopefully, recovery in confidence in Scotland and the north will accelerate as the economy strengthens across the regions.”
Peter Gallanagh, Azets
In addition, 56% of SMEs expect to recruit more staff during the next year and nearly three-quarters (73%) with employees on the Coronavirus Job Retention Scheme intend to return all of their workers from furlough.
But the feel-good factor is not as strong in Scotland, with 60% of SME owners feeling positive about the UK’s economic outlook, compared to 71% in London and the south.
Peter Gallanagh, chief executive for Scotland and the north, Azets, said: “There is a robust level of optimism across the SME community and the investment and recruitment intentions are very encouraging.
“The disparity in optimism between Scotland/the north and the south reflect the heavy weighting towards the service sector in the south, which is showing stronger and faster signs of recovery.
“Hopefully, recovery in confidence in Scotland and the north will accelerate as the economy strengthens across the regions, entrepreneurs start to invest and employment increases.”
Mr Gallanagh added: “Clearly there are wider challenges, with shortages of skilled labour, soaring raw material costs and the threat of inflation. SMEs will be adjusting their business models and considering innovative ways to reduce costs and their dependence on single supply chains.
“This is sound future-proofing and will help ensure they are well-placed to capitalise on growth opportunities.”
The research highlighted a stubborn optimism among SMEs and a pragmatic awareness of the need to adapt.”
Chris Horne, Azets
Financial health, adapting business models and employee wellbeing were ranked as the top three priorities by UK SMEs in the survey, which also took in Denmark, Finland, Norway and Sweden. The poll was a first for Azets and undertaken online by Echo Research.
The economy, Covid-19 and competition were the top three threats, with Brexit a key issue for UK SMEs outside London and the south-east. And more than one-third (34%) of UK SME business leaders reported a poor work-life balance.
‘Year of deep crisis’
Azets group chief executive Chris Horne said: “Our first SME barometer was conducted against an unusual backdrop. After a year of deep crisis and upheaval, with the vaccination programme accelerating and lockdown restrictions beginning to ease, the prospect of economic recovery feels within our grasp.
“The research highlighted a stubborn optimism among SMEs and a pragmatic awareness of the need to adapt to the ‘new normal’ post-Covid. Those who get this transition right will be in a better position to survive and thrive.”